Sept 23 Reuters Sterling dipped against the dollar on Monday but touched a new twoyear high versus the euro as business activity readings pointed to diverging economic cycles in the British and euro zone economies.

The pound slipped 0.2 to 1.3298, hovering below a more than twoyear high it touched against the dollar on Friday.

British businesses reported a slowdown in growth this month, according to a survey on Monday that also showed waning price pressures, potentially encouraging the Bank of England BoE to consider cutting rates again.

The preliminary estimate of the UK SP Global Composite Purchasing Managers39; Index PMI fell to 52.9 in September, below economists39; forecast of 53.5 but still well above the 50 level that separates growth from contraction.

Sterling, however, gained ground against the euro. Eurosterling slid 0.3 to 83.59 pence its weakest since August, 2022.

A similar survey showed euro zone PMIs sank to 48.9 this month from August39;s 51.0, with Germany39;s decline deepening and France returning to contraction following a boost in August due to the Olympic Games.

Market pricing showed traders are betting on 44 bps more of rate cuts from the European Central Bank by the end of the year, and 40 bps of easing from the BoE.

The ECB has cut rates twice this year, while the BoE has reduced rates just once. The central bank last week kept rates at 5.0, saying it would be careful about future cuts. Signs of economic resilience and sticky service sector…